Boeing Deal Off As Flyington Buys Airbus

May 9, 2007

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India's Flyington Freighters said on Wednesday it would not go ahead with an order of freight planes from Boeing after it signed a previously announced USD$1 billion order for six A330-200F cargo aircraft from rival Airbus.

"At this point in time, we are not going ahead with Boeing," T. Venkattram Reddy, chairman of Flyington Freighters, said on the sidelines of the signing ceremony with Airbus."

Flyington Freighters will pay USD$175 million for each Airbus plane, said Kiran Rao, executive vice-president for marketing and contracts, customer affairs at Airbus.

He said the first aircraft would be delivered in December 2009 and the remaining five in the following year.

When Airbus announced its order from Flyington Freighters in January, the Indian company said a previous order with Boeing was still in place.

Flyington Freighters said last July it had signed a purchase agreement for four Boeing 777F cargo planes worth almost USD$1 billion at list prices.

"We were in preliminary talks with Boeing, but Airbus gave us a better deal," Reddy said on Wednesday.

The Indian firm plans to start operations in July with two leased Airbus aircraft.

Rapid growth of air traffic in India, Asia's fourth-largest economy, is providing an attractive market for plane makers such as Being and Airbus.

Airbus said this week it would invest more than USD$1 billion in India's aviation industry over the next 10 years, and would increase the amount if needed.

Kingfisher Airlines, one of the several private airlines that have started operation in India in the last three years, has ordered five Airbus A380 passenger aircraft and has an option for five more.

Airbus has said it expects Indian firms will order aircraft worth about USD$105 billion over the next two decades.

(Reuters)